Closing large sales is vital for your equipment financing business’s growth; however, it can be challenging when clients are concerned about how a big purchase will impact their budget. Your business can increase sales by promoting its financing program to show clients how financing can help make an expensive purchase work with their budget constraints. To build a successful equipment financing program, you must promote it widely, so clients are aware of their equipment financing options.
Most effective tips that you and your sales team can use when selling your equipment financing programs to customers and grow your revenue
Understand your equipment financing programs inside and out
Ensure your salespeople are confident in all aspects of their sales pitch – financing included. Be sure to understand the cost of every equipment financing program you will be providing. Different programs come with different costs and might consist of “discounted bids” for some of your riskier clients. You have to know where your margins are and what you can afford to accept every deal since those costs cannot be passed on to your client directly.
Price your financing products accurately
Being the “low-cost lender” is not always a good thing. Very few businesses can afford that. Most firms price their products to reflect the value they offer their clients. Value can be anything from exceptional service, proprietary technology, or even financing. When pricing products, you might want to consider the average finance cost and establish it into your pricing. Bear in mind that raising the price for a customer based on the fact that they opt to finance is against Truth-in-Lending laws.
Train your sales team
Your sales team is vital to your equipment financing program’s success since they are the front-line staff interacting with clients every day. All your sales team members must receive in-depth training on your equipment financing programs, so they are able to:
- Explain how your financing programs work
- Properly position financing to clients
- Outline the requirements to qualify for equipment loans
- Address common concerns and questions from customers
Your sales team can not expect clients to ask about financing, so they should be able to recognize opportunities within their sales conversations to present equipment financing options. For instance, when a client asks about the price of a product, they are providing an opening to discuss financing solutions. Typically, the sales staff should be able to quickly and accurately offer a financing quote to clients. That way, clients get a clear picture of what their loan payments would be and how the cost fits within their budget.
Promote equipment financing and offer it to every client
Contractors that are the most prosperous with financing promote it in every marketing or sale channel possible and provide financing as an option to every client. Providing a finance option upfront can help discourage objections and proof that your product is affordable. Below are some steps you can take to make the most of your equipment financing options:
- Always incorporate “Financing available to qualified credit” in every client-facing document and all advertising materials.
- Select a special promotion or two that can be featured a few times per year. For instance, promoting a “3 months deferred” option during tax season can persuade a client to begin a project now instead of waiting for their return.
- Provide every customer at least two positive payment options. For instance: “Mr. Smith, the cash price is $4,000, or we also offer low monthly payments of $80 every month. What would work best for you?” Ensure you set the tone at the beginning of the presentation that the financing will be affordable.
- Review your client’s application before submitting it. Make sure that all sections are complete to give yourself the best chance for approval on every loan.
Control the sales procedure from the beginning to the end
Many equipment financing sales are lost when the equipment sales rep does not provide financing and leaves it up to an outside party, such as the customer’s bank. If the bank turns the client down, chances are the client will look to the equipment company that provided them financing in their proposal to try to acquire the equipment. This loss of control during the selling process is an open door for the client to entertain other proposals since the equipment rep did not keep control of the sales process from start to finish.
Bring up equipment financing early in the sales process
One of the biggest mistakes equipment sales reps make is to wait till the end of the selling process to bring up financing. Waiting till the end of the sales process results in wasting time on customers that do not qualify for financing and do not have the cash to pay for it. Another shortcoming of waiting until the end of the sales process is that the equipment sales rep has stripped out any gross margin upside that could have been used to pay for a finance promotion like a ninety-day skip or interest rate reduction, that would have put them over the top and won the deal.
Ask the following three questions
Train your equipment financing sales reps to ask these three questions at the beginning of the selling process. It will help them sell more financing products:
- Do you intend to finance your equipment purchase? (Begins the equipment finance discussion on the front side of the sale.)
- How long do you intend to utilize the equipment? (Allows you to know the term of the finance contract).
- What do you generally do with old equipment when buying new? (Good indicator of the need for FMV financing if they generally trade it in or sell it).
Memorize the 36-month rate factor
Great equipment financing sales reps are not afraid to ball park a monthly payment verbally in the initial part of the sale. This enables the equipment sales rep to judge their client’s reaction to pricing.
Sell the monthly payment and not the equipment price
Typically the best sales reps will quote a monthly payment without even discussing the equipment cost. This enables them to maintain higher gross margins by utilizing the flexibility of leasing to maintain pricing margins.
It is simpler to justify productivity gains or cost-saving with a monthly payment
It is amazing how equipment sales reps will try to justify the price of their equipment through benefits and features, and completely ignore using a monthly payment to reduce the price shock. For instance, a dealer can increase a $5000 sales by calculating that the cost is less than $5 per job when leased ($100/mo. lease divided by 20 jobs per month). This equipment’s sales would jump since it is easier selling $5/job than $5000.
Get a credit app finished before you leave the meeting
There hardly is any level of commitment if the end-user is just window shopping. Getting a credit app finished increases the customer’s level of commitment to the selling process.
A question that will assist in avoiding any credit surprises
Equipment financing sales reps can avoid the aggravation of not being able to get one of their clients financed by asking one simple question “Are there any issues in your history that I need to explain to the finance company?” You will be amazed by the number of businesses that forgot they had a bankruptcy a few years back.
Offer to get financials for bigger deals
If there is something that intimidates an equipment financing sales rep more than anything, it is the fear of asking their client for two years of financial statements. Alleviate this stress by telling the equipment rep to tell their client that you will be calling them for some follow-up credit information. It will be simpler for you to justify the need for the financials to the end-user.
Simplify the sign-up process
Make it as simple as possible for clients to apply for financing to alleviate application abandonment and customer frustration. Streamline the data collection procedure as much as possible, while still collecting all the vital customer information you require to complete a loan application. It is a good practice for businesses to provide customers as many sign-up options as possible. Apart from letting your customers apply for a loan in-store, you should also enable them to apply for equipment financing safely online, so they can complete the loan application on their own time and do not have to worry about their privacy. If you take the time to promote your equipment financing programs in-store, online, and through direct conversations with clients, your business can increase its revenue by closing more sales and driving larger transaction sizes.
To enhance your relationship, it is crucial to keep in touch with your customers. Lack of contact by some sales professionals might be deliberate to avoid being too pressurized in their sales approach. Nonetheless, staying in regular contact indicates maintaining consistent sales, revealing new opportunities, and keeping customers away from the competition. Making your customers feel important and not as if they are another business transaction will prompt them to open up and ask advice. Ultimately, this will open the way for you to request referrals from satisfied customers without feeling awkward about it.
Undoubtedly, selling in the financial services industry is challenging. By following the above as a process, you will find it simpler to grow your customer base by setting up meetings and acquiring new clients.